sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« News Headlines »
 What to do when you receive a notice from the tax department
 How to use your Form 16
 Which ITR form applies to you for financial year 2017-18?
 Income tax returns filing form-2 released; should you use it? Find out
  Are you planning to file ITR 1 form? here's how to do it Income Tax Return (ITR) filing
 30 LPA-Opening Financial Controller
 ITR form 2 in java release by CBDT for return filing by individuals
 How to file your income tax return using ITR Form-1 Income Tax efiling for AY 2018-19
 Income tax returns (ITR) filing: Have you received I-T dept notice? Safeguard yourself; here is how
 Delayed release of electronic ITR forms may compel CBDT to extend the filing deadline
 Trading volume linked to tax return?

SEZ tax relief likely to stay even in new tax regime
February, 09th 2010

The government is likely to clarify in the budget that special economic zones or SEZs would continue to enjoy tax benefits in their current form even after the proposed direct taxes code is implemented, providing clarity over taxation of these special enclaves.

The move follows commerce departments demand for clarity on taxation of SEZs, arguing that the proposed direct taxes code had created uncertainty amongst existing and potential investors over the kind of tax breaks they would get once the new code is in place.

We have taken up with the finance ministry the need for an immediate clarification as the uncertainty has already started affecting investment decisions in the zones, a commerce department official, who did not wish to be named, told ET.

The proposed direct tax code, which is tentatively scheduled to be implemented next year, talks about replacing the current tax exemption on profits with sops on investments made by developers.

Moreover, the tax code is not clear about the tax treatment of units located in the SEZs. The changes in the tax regime, if executed, could substantiually reduce the tax benefits enjoyed by SEZs, especially in sectors such as IT where investments are low.

SEZ developers are hesitating in taking investment decisions as they are unsure about whether they would be able to attract units if there is uncertainty in the taxation regime, said Vikram Bapat, executive director, PwC.

Even the units that have have already made investments were also apprehensive of losing out on tax benefits in the near future and new units, with long gestation periods, couldnt make out whether they were going to benefit at all from the policy.

In fact, we have heard from developers that the proposed tax regime is having an effect on current demand from potential unit owners, Mr Bapat said, adding that some clarity at this point would improve the investment climate.

Pointing out that SEZs were doing very well, L B Singhal, director general, export promotion council for EoUs and SEZs, said that SEZ investors were promised a stable policy regime.

It should be made absolutely clear that the existing units and developers would continue to enjoy sops under the SEZ Act, he said.

The commerce department, meanwhile, is continuing to push for totally delinking SEZs from the proposed DTC. We want SEZs to keep benefiting from provisions under the SEZ Act, the official said.

However, he added, while the country was finalising its view on the DTC, it was imperative to bring in clarity about the fate of existing investors.

Under the SEZ Act, SEZ units get 100% tax exemption on profits earned for the first five years, a 50% exemption for the next five years and another 50% exemption on re-invested profits in the following five years. SEZ developers, on the other hand, get 100% tax exemption on profits for ten years which they can choose in the block of the first 15 years.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions